KPMG’s Global Alternative Investment practice

KPMG’s Global Alternative Investment practice

KPMG’s global alternative investment practice is focused on hedge funds, real estate funds, private equity funds and infrastructure funds.


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Corridor leading to stairs

Our Global Alternative Investment practice is focused on hedge funds, real estate funds, private equity funds and infrastructure funds.  Our member firms combine their depth of local knowledge with our global cross-border experience to provide fund managers with the clarity and confidence to succeed. We have more than 800 partners and 10,000 professionals serving alternative investment clients in 60 major fund centers globally, complemented by KPMG’s audit, tax and advisory services and network of member firms across the globe.

Increasingly, investors are looking to alternative investments since they offer the potential for enhanced return from a broader, non-traditional investment approach while reducing overall portfolio risk. The latest statistics on global assets under management (AUM) confirm the steady re-emergence of the alternative investment management industry since the 2008 financial crisis. 

Growing demand for diversification

The ongoing low rate environment has investors considering alternative investments to provide diversification and to optimize the risk adjusted performance of their portfolios. Advisors are interested in alternative investments as they look to reduce volatility and manage downside risk in their investors’ portfolios. Alternative investments provide diversification by investment strategy, portfolio manager, industry sector, geography and liquidity needs.

Expanding investor group

Institutional and ultra-high net worth investors have become the core customer for alternative investments and demand is expected to continue to rise. While not always a major portion of their portfolio, pension funds and insurance companies have increased their overall allocations to alternative investments. Historically, high net worth investors have been alternative investors. However to grow this segment, managers need to meet the higher expectations of these investors, requiring an investment in distribution strategies and more investor and advisor education.

Optimizing for growth

Although growing assets under management (AUM) and net new inflow figures are encouraging, alternative investment fund managers face a number of challenges, which have put more focus on achieving an optimal business and operational model to meet financial goals.

  • Investors are demanding increased transparency, which means more frequent and enhanced reporting, with greater access to information delivered across multiple channels. Increasing scrutiny on fees has led fund managers to focus on developing efficient operations.
  •  Internally, fund managers encounter a range of challenges, from a weak knowledge base among their salesforce (sparking a need for education and training), to reputational risk, budget constraints and operational complexity.
  • Heightened regulation has increased the barriers to entry into the alternative investment management market and elevated operating costs. Having now assessed the many complexities that recent regulatory changes, such as the Alternative Investment Fund Managers Directive (AIFMD), have brought to the industry, fund managers have uncovered issues that require addressing. These include changes to systems and distribution, communications and reporting, among others. 
  • Cost management is one of the few controllable profit drivers and it often includes product rationalization, tax optimization, shared services and outsourcing.

The importance of data and analytics

With the immense and growing amount of data that is now available, there is an opportunity to utilize and build value for the funds.  Better business decisions are dependent on gathering, analyzing and interpreting data.  New requirements and reporting needs rely on data architecture, quality data and strong data governance.  Data can support product strategies and assist with predictive capabilities. At the same time, the threat of cyber-attacks demands prioritization of data privacy and protection.

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